Banking secrecy in Latvia gradually becomes more and more speculative dimension. As from 1st April numerous employees of the Revenue Service got access to it.
Henceforth the state financial control is entitled to require from a Latvian bank the information of the existence and holder of an account, operations, remaining balance, receive full transaction statements.
A secret known to two and more people ceases to be a secret. Banking secrecy known to two and more state institutions ceases to be banking secrecy, doesn’t it?
Of course, changes in legislation were introduced for a purpose – nobody has cancelled fighting shadow economics. Of course, the overwhelming majority of SRS staff members would exercise new rights in the public interests. But the expansion of the circle of persons vested with new rights entails risks that such rights can be exercised to the damage of the society itself, including the bank and its client and the image of banking environment, which to a great extent depends on the ability to keep secrets – banking, state and commercial.
It is no surprise that commercial banks sharply opposed amendments to legislation. Indeed, to receive information of tax operations of the clients SRS had enough tools before 1st April as well. In particular, the banks used to provide all necessary information to the Service on the prevention of money laundering.
But the authorities shut their ears to the bankers’ protests and the amendments to the Law on Taxes and Fees, according to which the credit institutions must provide SRS with information of suspicious transactions, have become operational.
What must be reported now to the state financial control? Within the meaning of the law the following transactions are suspicious:
1) An individual declares income, property and values of a suspicious origin;
2) Client settles a transaction unusually big for him;
3) Incoming transactions are not large, but outgoing ones involve large sums;
4) Real property is bought at an inadequate price;
5) A transaction does not have obvious legal purpose (or connection with a personal or business activity);
6) Falsified documents are used in a transaction;
7) A suspicious transaction is implemented involving electronic money;
8) Money is withdrawn from the account immediately after receipt;
9) An individual by one or several operations contributes cash to a commercial organization, pays, lends or borrows from other individuals EUR 60 000 or more.
10) Evasion of the taxes;
11) Dramatic changes in the account balance (increased turnover etc.);
12) Client has an unusually large number of accounts;
13) Turnover on account is formed, predominantly, by cash transactions;
14) Account is remote from the resident’s country;
15) Client works as ‘cover’ for third party’ transactions;
16) Transaction is atypical for a client;
17) Client settles complicated or unusual transactions (which do not have clear economical or legal purpose);
18) Use of money of uncertain origin.